IT + empowerment: a powerful duo

Its no surprise that journalists, as a breed, tend to be herd-like scavengers, ready to pounce on the carcass of any idea that even seems new. Just ask Bill Clinton or, better yet, Monica Lewinsky. And yet a number of business journalists, including some at well-respected magazines and newspapers, have outdone themselves recently in their coverage of information technology.

The newest business press feeding frenzy about IT, in case you havent read any of the articles on this topic recently, is that we cant really be sure whether becoming digital actually improves productivity. Sure its cool, sure it lets us do more stuff, these head-scratching reporters muse, but does it move the economy along any more efficiently? Hard to say, they pronounce with all the gravitas they can muster.

Give me a break.

These would-be pundits and propeller-heads are, of course, asking (and answering) the wrong question. The issue isnt whether IT improves productivity -- it unequivocally does, according to IWs recent Census of Manufacturers. The key question is, are we taking full advantage of the opportunities that digital tools offer?

It is no doubt true that many firms miss out on the full productivity boost that IT can bring because they use their new digital capabilities merely to run the same old processes. And yet even those firms still get some benefit. Data from the IW Census show that 31% of manufacturers that make extensive use of information technology experienced productivity growth of better than 20% during the last five years. In contrast, only 25% of all manufacturers reported that same level of improvement.

More interesting, though -- and more to the point of how we can best use IT to jump-start productivity -- is the way another group of manufacturers leveraged their use of technology with some simple, well-known management practices. In particular, those firms that combined extensive use of technology with empowerment strategies such as self-directed work teams experienced dramatic results. Fully 41% of firms that combined information technology investment with the inclusion of more than 50% of employees in empowered or self-directed work teams experienced productivity increases of 20% or more over five years.

The mystery, then, is why firms willing to invest enormous sums in IT solutions arent doing more to leverage those investments by adopting empowerment strategies. More than 60% of all manufacturers have 25% or less of their employees in empowered or self-directed work teams -- despite that fact that as the use of empowered teams increases, almost every measure of productivity and quality increases, too. Empowerment isnt easy -- it requires a commitment to training and to sharing information with employees that many managers find disconcerting -- but theres no dispute about its positive effect on productivity.

The only two questions left, in fact, are why more executives dont use empowerment, and why more business journalists dont ask those executives to explain their reluctance to empower their workers.